Traders’ Diary: Nifty’s next target at 10,500 level

Domestic equity benchmarks suffered losses for the second successive session on Thursday, mirroring the nervousness in global markets after a revenue warning from tech-giant Apple stoked fears of slowing global growth.

The Dow Jones Industrial Average fell 169.85 points, or 0.73 percent, at the open to 23,176.39. The S&P 500 opened lower by 18.11 points, or 0.72 percent, at 2,491.92. The Nasdaq Composite dropped 81.16 points, or 1.22 percent, to 6,584.77 at the opening bell.

Recently, Nifty turned south from the upper end of a crucial range at 10,920, also being the 100-DMA. It closed below its 200-DMA placed at 10,780 and is now approaching the 50-DMA. A move below the 10,670 mark will drag it lower to the 10,450 level in coming sessions, while a trade above its 200-DMA i.e. 10,780, will trigger a short-covering rally to 10,920 level

- Aditya Agarwala, Technical Analyst, YES Securities

06:05 PM

Thursday’s correction intensified as Nifty broke the 10,735 level on Wednesday. In the process, the index went on to retrace its recent upward move by 61.8 per cent. The index now trades around the ‘upward sloping trend line’ in the vicinity of 61.8 per cent and 100 per cent retracement levels at 10,670 and 10,620

- Sameet Chavan, Angel Broking

05:30 PM

Nifty has been making lower highs and lower lows since last two sessions, as it failed to surpass the crucial hurdle in the 10,925-10,985 zone. As long as it holds below 10,777 level, Nifty can remain under pressure with downside support at 10,600 and then the recent swing low of 10,535, while on the upside, the hurdle is seen in the 10,777-10,820 zone

- Chandan Taparia, Technical & Derivative Analyst, MOFSL

04:39 PM

It's the anxiety on the global front, which is haunting Indian market now. And it may continue to linger for some time and then earnings season would take over. We advise keeping cautious stance and maintaining balanced approach in trading. Nifty may see fresh fall below 10,650 and the next target could be 10,500

- Jayant Manglik, President, Religare Broking

04:37 PM

Market continued to trade on a negative bias on account of added worries over a slowing world economy and rising domestic fiscal deficit. A volatile equity market extended loss in Asia and in oil prices. Going ahead, the investors are likely to shift their focus to the corporate earnings beginning next week

- Vinod Nair, Head of Research, Geojit Financial Services

04:36 PM

Stock market traded on a weak and volatile note. The sentiment was impacted after provisional data showed that domestic and foreign funds, both, were net sellers of Indian equities on Wednesday. European and Asian markets traded under pressure while trading in US index futures indicated that the Dow Jones Industrial Average could slide 306 points at the open

Global tech giants Facebook, Apple, Amazon, Netflix, and Google-parent company Alphabet, commonly referred to as FAANG, have together wiped out some $1 trillion worth of investor wealth in their slide from respective high levels hit during the second half of 2018.

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Warren Buffett has a questionable track record investing in technology companies. It’s only getting worse with Apple Inc., which had already lost more than $350 billion in market value since October, diving Wednesday.

02:16 PM

Centrum Broking's high-conviction ideas for January

ACC: We like ACC owing to its attractive valuations amid healthy cashflow generation and return ratios. The recent announcement for a major capacity increase after a long pause of almost a decade affirms the promoters focus on growing India business. Rising industry utilisation should bolster pricing power, recent material supply agreement with Ambuja and sustenance of recent correction in diesel and petcoke prices should further provide profit tailwinds.

Bajaj Auto: We like Bajaj Auto as it is one of the leading 2W & 3W players and the largest exporter of both 2Ws and 3Ws from India. On export front, the company has market share of 40%+ in South Asia & the Middle East and 25% in Latin America. In 21 countries, which contribute 85% of its export sales, Bajaj is among the top-two players. In the era of premiumisation, a strong product portfolio entailing iconic brands like Pulsar, Avenger and KTM augurs wells for the company. Considering some pains (high cost of ownership, CV and tractor cycles may peak, BSVI implementation etc.) in domestic auto market, Bajaj Auto is safely placed with 40% sales exposure to export markets.

DCB Bank: DCB bank with well-defined product portfolio and customer segment stands to gain from the under-penetrated and under-served retail (self-employed) and SME segment, its key area of presence. Recent past has seen loan growth accelerate and we see momentum therein continue. While H1’19 have seen margins decline, we believe the same is set to inch upwards given ~70-95bps increase in MCLR rates since Mar’18. Our calculation suggest that the newly added branches have started to break-even. This is evident in reducing cost / asset ratio. Capital position remains strong and supplement strong loan growth. We see DCBB report 1.1% RoA / 14% RoE by end-FY20E. BUY.

State Bank of India: State Bank of India is best placed to capitalise on the growth opportunity following a) improved credit environment, b) favorable bond yield movement and c) recovery from NPA accounts. Loan growth has been on rise (Q2’19 domestic loans grew 11.1%) and we see traction therein to continue. The reduced slippages, loan growth acceleration and a stable interest cost has seen margins inch higher. We see NIM inching towards 2.7% by end-FY20E (vs. 2.5% for FY18). Slippages have been on a decline; trends are set to remain encouraging in H2’19 as well. While we see credit cost remain high, the softening in G-sec yield (down ~55-60bps since Sept’18) will see investment provisions reverse and in turn lower the overall provisioning charge. We also see SBI report strong trading gains in Q3’19.Valuations continue to remain attractive. BUY.

Tata Metaliks: We like Tata Metaliks (TML) as its DI pipe business boasts of an industry leading cost structure, solid demand drivers and strong entry barriers. With commissioning of PCI project by Q4FY19E coupled with several other productivity improvement initiatives, TML is expected to continue delivering steady earnings growth over FY19-20E despite limited volume growth as its plants are running at 100%+ utilisations currently. TML also has plans to expand its market share in the high margin DI pipes business from 11% currently to 18-20% range in 3-5 years and we expect management to announce expansion towards the same soon. We see valuations attractive at FY19E P/E of 8.7x with reasonable scope for a re-rating given the strong balance sheet and attractive return rations. Maintain Buy with a TP of Rs1015.

01:56 PM

Nestle India pares gains as SC sets aside NCDRC order

Shares of Nestle India fell from the day’s high after Supreme Court revived the class action suit filed by the Central Government against the company’s Maggi noodles, while setting aside NCDRC order.

After rising over 4 per cent to Rs 11,499 in the morning session, the stock pared gains and was trading at Rs 11,253, up by 1.92 per cent at 1:25 pm.

The company had moved the apex court against the tests ordered by the National Consumer Disputes Redressal Commission (NCDRC).

01:26 PM

My view is that over the next one two years, value will take precedence over growth. Companies which have been slowly growing but have not seen rapid growth have been ignored by the investors and a lot of those companies are on the mid and smallcap side.

- Sunil Singhania, Abakkus Asset Manager

01:20 PM

India sees 7.36% drop in coffee exports in 2018

Coffee exports from India declined 7.36 per cent on a year-on-year basis to 3.50 lakh tonnes in 2018 owing to a fall in shipment of robusta and instant coffee varieties, according to Coffee Board.

In terms of value also, coffee exports dropped to Rs 5,770.48 crore in 2018 from Rs 6,091 crore in the previous year.

Italy was the top export market for India in 2018, as 76,437.56 tonnes of coffee was exported to the country followed by Germany (28,582 tonnes) and Russia (21,397 tonnes). (Source: PTI)

Nestle cracks as Maggi-maker finds itself in legal soup again

Eicher Motors hits near 3-month low on weak December sales numbers

Shares of Eicher Motors slipped nearly 3 per cent in Thursday’s trade to Rs 20,564.70. The shares had last hit this level on October 4, 2018.

The stock continued to drag after it had posted disappointing December sales data on Monday. Royal Enfield, the two-wheeler division of Eicher Motors had reported a 13 per cent decline in total sales to 58,278 units in December compared with 66,968 units in the same month last year.

At 11.28 am, the scrip was trading at Rs 20,712.30 on BSE, down 2.13 per cent.

12:24 PM

The next six months for the hotel industry are quite good. 60% of their revenues come in during these two quarters. For a lot of these companies, the cost is fixed in nature. If my ARRs improve, the delta on the bottom line is quite high. We like the entire hospitality space, whether it is Indian Hotels, Taj GVK, EIH.

The market cap-to-GDP ratio, largely known as Buffett indicator, now stands at 80 per cent against a long-term average of 78 per cent. This is much better than 113 per cent for US and 82 per cent for the rest of the world.

With earnings improving in the next couple of quarters, this indicator may drop to 75 level, which may make domestic equities attractive.

12:10 PM

Alembic Pharma gets USFDA nod for Parkinson's treatment drug

Drug firm Alembic Pharmaceuticals Thursday said it has received approval from the US health regulator for Pramipexole Dihydrochloride extended-release tablets used for the treatment of Parkinson's disease.

The approval from the United States Food and Drug Administration (USFDA) is for the company's abbreviated new drug application (ANDA) for Pramipexole Dihydrochloride extended-release tablets, in the strengths of 0.375 mg, 0.75 mg, 1.5 mg, 2.25 mg, 3 mg, 3.75 mg, and 4.5 mg, Alembic Pharmaceuticals said in a filing to BSE. (Source: PTI)

11:58 AM

M&M Fin Services plans to raise up to Rs 3,500 cr via NCDs

Mahindra & Mahindra Financial Services plans to raise up to Rs 3,500 crore through public issue of non-convertible debentures (NCDs).

The company plans to undertake a public issue of NCDs for an amount aggregating up to Rs 500 crore (base issue size), opening on January 04, 2019. The issue will close on January 25.

It will have an option to retain oversubscription up to to Rs 3,000 crore aggregating up to Rs 3,500 crore (tranche I issue).

After a massive exodus of foreign funds from the country's capital market segment in 2018, analysts anticipate a recovery in inflows on the back of robust corporate earnings and resolution of the ongoing liquidity crisis.

Experts are of the opinion that foreign fund outflows last year was due to rise in US interest rates, global trade wars and the state elections.

11:20 AM

Telecom stocks slip on weak subscriber data

Indian telecom stocks such as Vodafone Idea Ltd lost ground on Thursday after the industry regulator released monthly data that showed a bleak rise in the country's mobile phone customer base.

Vodafone Idea, the country's largest telecom operator by subscribers, lost 7.4 million users, while Bharti Airtel Ltd , the No. 2 telecom firm, lost 1.9 million subscribers during the month.

Reliance Jio Infocomm Ltd added 10.5 million subscribers to its network, making it the third biggest in the country.

11:16 AM

MAHB cancels Hyderabad airport stake sale pact with GMR

Malaysia Airports Holding Berhad has said it terminated the Share Purchasing Agreement (SPA) with the GMR Group for selling its 11 per cent stake to the latter as the Indian infra major did not fulfil the obligations as per the agreement before December 31.

GMR Infrastructure Limited in February last year said its subsidiary GMR Airports Limited entered into an agreement with Malaysia Airports Holding Berhad and its subsidiary to acquire 11 per cent of the stake that the Malaysian company is holding in GMR Hyderabad International Airport, for USD 76 million.

GMR Infrastructure shares were trading at Rs 16 apiece on the BSE at 10 a.m.

10:22 AM

ONGC declined 2% as OVL listing not in sight

Shares of state-owned Oil and Natural Gas Corporation (ONGC) declined 2 per cent in Thursday's session after the company said the government has not yet asked it to reconsider listing its overseas arm ONGC Videsh on bourses.

10:21 AM

According to my calculation, Dena Bank has been valued at a discount of close to 26.5% to Bank of Baroda and Vijaya Bank at close to 6% discount. For Dena Bank, it is quite justified, their asset quality being much weaker. They had a GNPA of close to 23.5% compared to Bank of Baroda’s 11.7%.

- Siddharth Purohit, SMC Global Securities

10:14 AM

ETRadio: Let's talk business & markets

Shares of Vijaya Bank and Dena Bank fell up to 18 per cent in Thursday's trade while those of Bank of Baroda (BoB) climbed 3 per cent as investors judged the swap ratio for the merger between the three banks to be favourable for the latter.

Shares of Bank of Baroda (BoB) rose nearly 3 per cent in early trade on Thursday. Shares of Dena Bank and Vijaya Bank, on the other hand, dived 18 per cent and 6 per cent, respectively.

The Cabinet approved the merger of Vijaya Bank and Dena Bank with Bank of Baroda on Wednesday.

09:22 AM

Check out the most active stocks on NSE

Price as on 03 Jan, 2019 09:22 AM, Click on company names for their live prices.

Pre-open session: Sensex, Nifty flat; rupee trades at 70.29 against the US dollar

Sensex, Nifty trade flat; Rupee trades at 70.29 against the US dollar.

09:05 AM

Singapore trading sets stage for positive start

Nifty futures on the Singapore Exchange were trading 15.5 point, or 0.14 per cent, higher at 10,847.50, indicating a firm for the Nifty50.

09:04 AM

Tech view: Nifty forms bearish candle

The index formed a small bearish candle on the daily chart and formed lower lows for the second session. It eventually closed a tad above its 200-day moving average at 10,790 level. “The near-term metrics are mixed. The sharp fall clearly indicates lack of confidence among market players. One should use any rally towards the 10,950-11,100 zone to close speculative and leveraged long positions,” said Arun Kumar, Market Strategist at Reliance Securities.

09:04 AM

Asian shares edge lower

Shares in Asia fell on Thursday and US stock futures dropped sharply after Apple Inc cut its revenue forecast due in part to weaker sales in China, adding to concerns about the slowing global economy, Reuters reported. MSCI’s broadest gauge of Asia-Pacific shares outside Japan slipped 0.2 per cent early in the Asian day and losses were expected to mount when trading opened in more tech-heavy markets in the region.

09:04 AM

US stocks eke out gains

The S&P500 index advanced 3.18 points, or 0.13 per cent, to 2,510.03. The Dow Jones Industrial Average index added 18.78 points, or 0.08 per cent, to close at 23,346.24. The Nasdaq Composite index added 30.66 points, or 0.46 per cent, to 6,665.94.

09:04 AM

BoB-Dena-Vijaya Bank merger approved

The Union Cabinet on Wednesday approved the merger of Bank of Baroda, Vijaya Bank and Dena Bank that will create India’s second largest public-sector lender and cleared amendments to the Trade Union Act which seek to allow the central government to recognise trade unions. Traders expect the shares of both Dena and Vijaya Bank to fall on Thursday as investors sell the stocks to adjust them to the value of the swap ratio.

09:03 AM

80% stocks see no LTCG tax after sub-zero returns

The reintroduction of long-term capital gains (LTCG) tax for listed equities had little impact in 2018 with Bloomberg data showing 862 out of the 1,058 stocks of BSE Allcap index turned negative returns since January 31, 2018 — the benchmark date for capital gains calculation.

09:03 AM

Mutual fund buys 36 lakh shares in JK Cement

A sizeable chunk of JK Cement’s recent share sale to institutional investors was gobbled up by one large asset manager. The buzz is that the public sector mutual fund picked up 35.9 lakh shares in the 73.41 lakhshare-qualified institutional placement or QIP.

09:02 AM

ETF assets hit Rs 1 lakh crore mark

The AUM of passively managed funds have crossed the Rs 1 lakh crore mark. While most of the funds continue to come from the mandatory contribution to the EPFO, financial planners point out that an increasing number of HNIs and retail investors have started pouring money into index funds and ETFs as actively managed funds in the large-cap space have failed to outperform their benchmarks.

09:02 AM

FY18 direct tax-to-GDP ratio best in 10 years

The direct tax-to-GDP ratio of 5.98 per cent achieved during 2017-18 is the best in the last 10 years, the finance ministry said Wednesday. It was 5.57 per cent in 2016-17 and 5.47 per cent in 2015-16.

09:01 AM

Manufacturing PMI eases from 11-month high

The Nikkei Manufacturing Purchasing Managers’ Index declined to 53.2 in December from 54 in November. A reading of over 50 on this survey-based index indicates expansion, while a figure below that reflects contraction.